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Indiegogo launches crowdsourcing for big businesses

Lucas Mearian | Jan. 7, 2016
Crowdfunding campaigns not only fund R&D, they're a forum for new, consumer-based ideas

GE's first Indiegogo campaign was so successful that it launched a second one in July to prove market demand for a countertop nugget ice-making machine for the home. GE offered the Opal icemaker for $399 to early buyers on Indiegogo, with a future retail price of $499. The icemaker will be shipped to Indiegogo contributors in mid-2016.

GE's Opal icemaker project raised $100,000 in the first hour; $600,000 in the first 48 hours and $2.64 million total from 6,177 contributions by the end of the 30-day Indiegogo campaign. The campaign also garnered 510,000 page views and 15,000 Facebook shares.

"GE actually had this idea for over 20 years in their R&D lab, and never really understood the right way to launch it," said Andrew Erlick, director of Indiegogo's corporate partnerships. "They didn't know if there was a consumer market for it, didn't know how well it would do if they spent the millions of dollars on making that product a reality."

It took GE just four months to move the icemaker from concept to production using the Indiegogo campaign, according to Natarajan Venkatakrishnan, head of R&D for GE Appliances and director of FirstBuild.

"If it flops, no worries. Upfront costs were some 20 times less than a traditional product rollout, which can cost tens of millions of dollars," Venkatakrishnan said. "If we're going to fail, we want to fail fast."

There is no qualification process for corporations to use Indiegogo. Like small companies or entrepreneurs, they simply create a product or idea campaign page and add videos and descriptions for the products or ideas. Indiegogo charges companies 5% of every dollar rasied through the campaign.

The Indiegogo Enerprise campaigns also do more than just raise funds for product development and production. Indiegogo offers help for enterprises who need to understand which projects are right for crowdsourcing and which may not be.

Additionally, consumers who participate in the corporate crowdsourcing campaigns offer product feedback online, which Indiegogo culls and offers to its corporate clients at the end of a campaign.

"There's a lot of data that is happening prior to launching the campaign, then during the campaign, and then after the campaign," Erlick said.

Josh McClain, engagement manager for Indiegogo's Enterprise Crowdfunding Program, said consumers enjoy the idea that they have the power to shape a final product through their feedback.

"They also want to be able to get product before anyone else and to get [it] cheaper than before its retail," McClain said.

Conversely, enterprises like the idea that they can raise funding for R&D without alarming their shareholders by pouring revenues into unproven products.

Hasbro, for example, launched an Indiegogo campaign early in 2015 to find its next big party board game, like Monopoly.

 

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